Growing a business is complex, and there are many small business problems and solutions that new founders need to be aware of. According to the US Bureau of Labor Statistics, 22% of companies fail in their first year, with 50% failing within five years.
Staying on top of the biggest small business challenges and overcoming them is what will allow your business to succeed where others fail. Here are the most noteworthy.
Challenge: Financing for new business owners can be tricky. Acquiring capital is an essential component of small business problems and solutions because, without enough money, businesses are destined to go under.
Solution(s): Funding for small businesses can take many forms:
Not sure where to start? Rayl.Financial will be your best bet for fast business funding (expected launch in Q1 2022). Borrow depending on your needs and pay interest only on what you use.
Challenge: 29% of small business owners open their doors because they’re ready to be their own boss, and 17% do so because they’re dissatisfied with corporate life. However, one of the most significant benefits of working at a company for most people is a clear idea of what tasks need to get done.
Money management is a crucial part of small business problems and solutions because, when mismanaged, a lack of money can cause businesses to go under. Even if you acquired that capital to begin with, using it correctly is essential.
Solution(s): Of utmost importance for small business owners is shoring cash reserves. Problems will always arise, some of which require a lot of money to fix, and you want to have the money to ride them out. COVID shutdowns are a jarring example of this.
When cash flows through the business, hiring professional help to oversee money management is a bright idea. The complexities of budgets and finances can take too much time away from business owners.
Challenge: Once cash flows and the business grows, small business owners must look towards building a budget. This essential part of small business problems and solutions keeps your company growing well into the future.
Solution(s): Your small business budget should include:
Challenge: Currently, half of small business owners feel it’s more challenging to find employees now than a year ago. Since COVID, there’s been a rising shortage of workers and uncertainty around procedures and safety measures. Finding employees who are the right fit for your small business can be tricky.
Solution(s): Here are some strategies to incorporate into your hiring practices:
Challenge: Training employees is one of many significant small business problems and solutions because it’s a big factor in determining the success and longevity of your workers. One survey uncovered that while over 90% of small business owners find value in training, fewer than half do so.
Solution(s): Start by creating a formal employee training process. At a high level, this includes potential training software, documentation processes, training before someone begins full-time work, how people can take days off, and more.
Challenge: One company found that 70% of employees were more engaged at companies where performance, goals, and objectives were communicated clearly. Training your employees is an essential part of this small business problems and solutions guide because, without it, you can lose some of your best talent.
Solution(s): Start by clearly defining roles and responsibilities, and let people know how you’ll evaluate them. Communicate feedback clearly and honestly, have procedures for time off, and hold regular check-ins between managers and employees.
If your small business is still small enough that you, the founder, manage most employees, do what you can to improve your leadership skills.
Challenge: One of many common small business problems and solutions surrounds building marketing strategies for your company. There are many marketing channels and approaches to consider when reaching your ideal customer, so where do you begin?
Solution(s): First, start by understanding your marketing goals and objectives. From there, identify your target audience -- get super detailed with this. Build “fake” but representative customer profiles specifying age, education level, income, hobbies, etc.
Once you know your goals and target audience very well, you can begin hashing out a strategy. Based on your ideal customer and marketing goals, what channels, language, and frequency should you use for your marketing efforts?
Challenge: Now that you have a marketing plan, it’s time to tackle resource allocation. How do you know how many resources to allocate where?
Solution(s): At first, when you have no data, you’ll be “best guessing.” Which marketing strategies do you think will be most effective given your target audience?
Once you begin collecting data, you can see which strategies convert the most efficiently or show the most potential. These are the ones you want to allocate the most resources to. Leave some leftover resources for new marketing strategies or smaller efforts, as these complement the more successful tactics.
Challenge: What sets you apart from your competitors? What is your company known for? For Amazon, it’s fast delivery times. For Netflix, it’s instant access to your heart’s desire of TV content. For Chanel, it’s luxury and attraction. One common part of small business problems and solutions is determining your small business’ brand.
Solution(s): Start by identifying core values for your small business. These can include sustainability, diversity, a customer-first approach, and more. From there, focus on consistent messaging across platforms that highlights these values.
From the newest hire up to you, the founder, make sure that everyone embodies core values each day.
Challenge: One common component of small business problems and solutions is acquiring new customers. Especially when you’re first starting, how do you reach your target audience?
Solution(s): According to FleishmanHillard, 89% of people begin their customer journey by looking for new businesses on search engines. While there are many customer acquisition strategies you can deploy, organic search should be one of them.
More broadly, consider the following customer acquisition methods:
Challenge: Customer churn can be a costly part of running any business, particularly a smaller one. According to HBR, it costs 5-25x more to acquire a new customer than retain a current one.
Solution(s): Start by delivering the best customer experience possible. Address complaints and handle customer service issues promptly. Almost 90% of customers will pay more for an A+ customer experience, which keeps them coming back. Consider adding a loyalty program, as well, to help boost retention.
Handling all the problems that arise when running a small business is notoriously challenging. Using the right tools can be the difference between thriving and failing.
The RAYL Super Platform is proud to give small business owners access to a comprehensive set of tools needed to grow their companies. These include payment processing, business management, and financial assistance software. The company anticipiates the platform will be fully operational in Q1 2022. Learn more here!
Read the story to learn how RAYL is providing a compelling value proposition using big data to the SMEs
RAYL is creating an ecosystem: "The World of RAYL" is a complete, enterprise-class business suite, an all on one interoperable platform. Watch the corporate video to gain an insight into the value RAYL provides to you.
Listen to how Nicholas Jeffery, President and CEO of RAYL talks about what a brand is and how to build a global company with a remote team of work from home spread across five continents. Learn how his team is positioning RAYL to be a unicorn in the Fintech space.